An Eclectic Journal of Opinion, History, Poetry and General Bloviating

Tuesday, January 10, 2017

Spindletop—The Gusher that Changed the World

Lucas #1 gushes on Spindletop Hill in Texasin 1901. Up to 50,000 people came to gawk at the spectacle over nine days before Lucas could get the well under control and capped.

After
almost nine years of poking useless
holes into a salt dome formation near
Beaumont, Texas in the southeast corner of the state near the Louisiana line and Gulf Coast some nearly
busted and discouraged wildcatters watched
in amazement as oil geysered 150
feet in the air from a well head at
a rate of 100,000 barrels per day. It
took nine days before the well was brought under control.When the well began pumping instead of spewing just the “instant” millionaires" made by the strike, an oil
boom was set off around the Gulf
Coast, an industry was disrupted and transformed, and the door was
opened to the age of the automobile for
better or for worse.

The
petroleum industry got its start in
1859 when Colonel Edwin L. Drake
struck rock oil at Titusville, Pennsylvania.It grew
rapidly after the Civil War based on
demand for a replacement of whale oil as a lamp fuel—coal oil or kerosene—lubricants
for the railroads and other
rapidly expanding industries, and eventually as a heating fuel.Oil quickly
became one of the most valuable
commodities in the U.S.

By
the late 1870 John D. Rockefeller and
his partners dominated the oil
industry via a spider web of companies centered
on his Standard Oil of Ohio.In 1882 those companies were consolidated into the nation’s first all-powerful Trust under the holding company, Standard Oil of New
Jersey.It controlled virtually all production, distribution, and sales of
oil products and quickly used its power to ruthlessly destroy upstart competitors, drive prices high, and evade
state laws intended to regulate
it.

John D. Rockefeller about the time he organized Standard Oil of Ohio.

Public outrage, spurred by the
work of muckraking journalists, led
to the passage of the Sherman Anti-Trust
Act which regulated or made many of Standard Oil’s business practices illegal under Federal Law.Under siege, legions of lawyers fought enforcement for
years.It was not until 1911 that the courts finally ordered the break-up of Standard Oil into regional companies.

Meanwhile
production in Pennsylvania peaked
around 1890.Exploration led to new fields, satisfied with those prices company
official were slow to expand exploration to the West and South.Even if they had wanted to, its business practices had so stirred up
the Populist mostly in the Midwest which barely kept up with
expanding demand contributing to high prices.Sentiment
was riding so high against the company that Texas had barred
Standard Oil from operating in the state in 1900.The door
was ajar.

Everyone
knew there was oil around the Gulf where it bubbled to the surface in
several areas on land, swampy bayous, and even in Gulf waters.Native
Americans had long used it as a salve
and medicine.Huckster
showmen were mixing it with alcohol and sometime cocaine to peddle by the bottle as patent
medicine.The trick was finding ways to extract the oil in quantity economically
enough to compete with Standard Oil.

Enter
the wildcatters who took their name from the Wildcat banks of the Jacksonian
Era which fraudulently issued
banknotes with little orno capital to back them up.Similarly independent oil speculators formed companies, sold stock, and borrowed
money to finance their
operations.The vast majority of the
wildcatters went bankrupt, often multiple times taking down their investors and creditors with them.

Wildcatter Pattillo Higgins was in on early drilling at Spindletop but was cut out of the deal that financed the ultimately successful well.

left
the lawman dead after trying to torch a Black Baptist church—left the group and sought new backers and
partners.A he found Croatian bornCapt. Anthony F. Lucas, an expert in salt domes who agreed with his assessment that there was oil under
the hill.In 1899 the new partners began to drill again, but the light equipment Lucas used collapsed
when they reached a depth of 575.So did
their their credit.

Instead
Lucas cut a new deal for backing with Pittsburgh
investors James M. Guffey, who held and controlled funds, and John H. Galey it left him with a minority stake and cut out Higgins
entirely.Lucas resumed drilling in
October 1900 with a new experienced crew.It was a difficult drill through unsteady
sand but on January 10 the crew of roughnecks
was sent scurrying for their lives as a six ton, four-inch drilling pipe
shot out of the hole.Officially named Lucas #1 but usually called the Lucas gusher, the success of the well set off a stampede of
exploration on Spindletop which rapidly spread to other Gulf sites in Texas and
Louisiana.The Oil Boom was on.

The
single well produced around 100,000 barrels a day. The population of Beaumont
mushroomed from 8,000 to 60,000 within a year. By 1902 285 wells were operating
on Spindletop Hill and over 600 oil companies had been chartered. Lucas, a minority partner, did not share in the bonanza
of wealth produced by the well.He
parted company with the company leaving it in the hands of the Eastern
investors by the end of the year.

Higgins
for his part sued Lucas and his former partners claiming that he still held the
valid lease on the mineral rights of the well.The complicated case dragged out in the
courts but in 1903 Higgins was essentially
paid off with $3 million to go away.He went on to found other oil companies,
usually quarreling with his partners and leaving before the wells could produce
much revenue.

The
Oil Boom came at an auspicious moment.It assured what seemed like unlimited supplies of cheap oil just as the infant automobile industry was about to take off.Heretofore scores of small companies had been founded the most successful
of which hand built a dozen or so
cars a year for sale to the rich in search of new toys and ways to display
their wealth.But the matter of how automobiles would
be powered was far from settled.Several
companies were producing battery powered
electric cars and steam still
looked to many as a viable option.The prospect of cheap gasoline tipped the scales to internal combustion engines.

In
1903 the Curved Dash Olds became the
first successfully mass marketed
car.Soon several companies with familiar names were turning out luxury cars—Cadillac, Packard, and Buick among them.Henry
Ford entered the market with his inexpensive
assembly line produced Model T in 1908 which put motoring within the reach of the middle class and within a few years even blue collar workers.By 1920
millions of vehicles were on the road, city streets were being paved, and a haphazard web of interconnecting
highways was being developed.America was on wheels and
powered by gasoline.

All
of the wealth produced by this boom was not destined to stay in the hands of small time operators like Higgins and
Lucas and the others that followed them to Spindletop and to a succession of
oil boom towns from Tampico in Mexico to the Texas interior
and Oklahoma up to Wyoming and out in California.Sometimes led by
an astute oil man but more
frequently by bankers and Wall Street
investors small firms were gobbled
up and linked to refineries and distribution systems.Out of Spindletop and surrounding oil
fields Gulf Oil and Texaco were formed and were soon
competing with Standard Oil and after the Federal break-up its still powerful
regional descendants.In post World War I America branded gas stations became a national fixture.

The movie classic Boom Town was inspired by friendship turned to bitter rivalry betwen Higgins and Lucas.

TheLucas Gusher Monument is a nearly 60
foot tall obelisk topped by a Texas Lone Star that was erupted at the site
of the original well head in 1941.In
1977 it was moved to the Spindletop
Gladys City Boomtown Museum in Beaumont near a reproduction of the original oil derrick.Today a flag pole marks the original well.